Abstract
Software startups are newly created companies with little operating history and oriented towards producing cutting-edge products. As their time and resources are extremely scarce, and one failed project can put them out of business, startups need effective practices to face with those unique challenges. However, only few scientific studies attempt to address characteristics of failure, especially during the early-stage. With this study we aim to raise our understanding of the failure of early-stage software startup companies. This state-of-practice investigation was performed using a literature review followed by a multiple-case study approach. The results present how inconsistency between managerial strategies and execution can lead to failure by means of a behavioral framework. Despite strategies reveal the first need to understand the problem/solution fit, actual executions prioritize the development of the product to launch on the market as quickly as possible to verify product/market fit, neglecting the necessary learning process.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
References
Smagalla, D.: The truth about software startups. MIT Sloan Manage. Rev. (USA) 45(2), 7 (2004)
Blank, S.: The four steps to the epiphany, 1st edn. CafePress (February 2005)
Crowne, M.: Why software product startups fail and what to do about it. In: Proceedings International Engineering Management Conference (IEMC), pp. 338–343 (2002)
Sutton, S.M.: The role of process in software start-up. IEEE Software 17(4), 33–39 (2000)
Paternoster, N., Giardino, C., Unterkalmsteiner, M., Gorschek, T., Abrahamsson, P.: Software development in startup companies: A systematic mapping study. Information and Software Technology (forthcoming)
Marmer, M., Herrmann, B.L., Dogrultan, E., Berman, R., Eesley, C., Blank, S.: The startup ecosystem report 2012. Technical report, Startup Genome (2012)
Coleman, G., O’Connor, R.: Investigating software process in practice: A grounded theory perspective. Journal of Systems and Software 81(5), 772–784 (2008)
Christensen, C.M.: The Innovator’s Dilemma. Harvard Business School Press (1997)
Storey, D.: Entrepreneurship and the New Firm. Croom Helm (1982)
Perkins, A.B., Perkins, M.C.: The Internet Bubble: Inside the Overvalued World of High-Tech Stocks – And What You Need to Know to Avoid the Coming Catastrophe. HarperInformation (1999)
Marmer, M., Herrmann, B.L., Dogrultan, E., Berman, R., Eesley, C., Blank, S.: Startup Genome Report Extra: Premature Scaling. Technical report, Startup Genome (2011)
Ruokolainen, J., Igel, B.: The factors of making the first successful customer reference to leverage the business of start-up software company - multiple case study in thai software industry. Technovation 24(9), 673–681 (2004); Cited By (since 1996): 4
Ruokolainen, J.: Gear-up your software start-up company by the first reference customer - nomothetic research study in the thai software industry. Technovation 25(2), 135–144 (2005)
Macmillan, I.C., Zemann, L., Subbanarasimha, P.: Criteria distinguishing successful from unsuccessful ventures in the venture screening process. Journal of Business Venturing 2(2), 123–137 (1987)
Yu, Y.W., Chang, Y.S., Chen, Y.F., Chu, L.S.: Entrepreneurial success for high-tech start-ups - case study of taiwan high-tech companies, Palermo, Italy, pp. 933–937 (2012)
Petersen, K., Feldt, R., Mujtaba, S., Mattsson, M.: Systematic Mapping Studies in Software Engineering. In: Proceedings of the 12th International Conference on Evaluation and Assessment in Software Engineering (EASE), pp. 1–10 (2007)
Yin, R.K.: Case study research: design and methods. Sage Publications (1994)
Kitchenham, B., Charters, S.: Guidelines for performing Systematic Literature Reviews in Software Engineering. Technical Report EBSE 2007-001, Keele University and Durham University Joint Report (2007)
Miles, M., Huberman, A.: Qualitative Data Analysis: An Expanded Sourcebook, 2nd edn. Sage, Thousand Oaks (1994)
Kitchenham, B., Dyba, T., Jorgensen, M.: Evidence-based software engineering. In: Proceedings of the 26th International Conference on Software Engineering, ICSE 2004, pp. 273–281 (May 2004)
Dyba, T., Kitchenham, B., Jorgensen, M.: Evidence-based software engineering for practitioners. IEEE Software 22(1), 58–65 (2005)
Davis, A.: Operational prototyping: a new development approach. IEEE Software 9(5), 70–78 (1992)
Ries, E.: The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. Crown Business (2011)
Hui, A.: Lean change: Enabling agile transformation through lean startup, kotter and kanban: An experience report, Los Alamitos, CA, USA, pp. 169–174 (2013)
Carmel, E.: Time-to-completion in software package startups. In: Proceedings of the System Sciences, pp. 498–507 (1994)
Midler, C., Silberzahn, P.: Managing robust development process for high-tech startups through multi-project learning: The case of two European start-ups. International Journal of Project Management 26(5), 479–486 (2008)
Hilmola, O.P., Helo, P., Ojala, L.: The value of product development lead time in software startup. System Dynamics Review 19(1), 75–82 (2003)
Park, J.S.: Opportunity recognition and product innovation in entrepreneurial hi-tech start-ups: A new perspective and supporting case study. Technovation 25(7), 739–752 (2005)
Preston, J.T.: Building success into a high-tech start-up. Industrial Physicist 9(3), 16–18 (2003)
Kakati, M.: Success criteria in high-tech new ventures. Technovation 23(5), 447–457 (2003)
Hunt, F., Probert, D., Wong, J., Phaal, R.: Valuation of technology: Exploring a practical hybrid model, pp. 47–53 (2003); Cash flow analysis; Product life cycles
McAdam, M., McAdam, R.: High tech start-ups in university science park incubators: The relationship between the start-up’s lifecycle progression and use of the incubator’s resources. Technovation 28(5), 277–290 (2008)
Yogendra, S.: Aligning business and technology strategies: a comparison of established and start-up business contexts. In: Proceedings of the Internal Engineering Management Conference (IEMC), pp. 2–7 (2002)
Cope, J.: Entrepreneurial learning from failure: An interpretative phenomenological analysis. Journal of Business Venturing 26(6), 604–623 (2011)
Basili, V.R., Heidrich, J., Lindvall, M., Münch, J., Regardie, M., Rombach, D., Seaman, C., Trendowicz, A.: Linking software development and business strategy through measurement. arXiv preprint arXiv:1311.6224 (2013)
Kaplan, R.S., Norton, D.R.: The balanced scorecard: Measures that drive performance. (cover story). Harvard Business Review 83(7/8), 172–180 (2005)
Klein, H.K., Myers, M.D.: A set of principles for conducting and evaluating interpretive field studies in information systems. MIS Quarterly, 67–93 (1999)
Corbin, J., Strauss, A.: Grounded theory research: Procedures, canons, and evaluative criteria. Qualitative Sociology 13(1), 3–21 (1990)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2014 Springer International Publishing Switzerland
About this paper
Cite this paper
Giardino, C., Wang, X., Abrahamsson, P. (2014). Why Early-Stage Software Startups Fail: A Behavioral Framework. In: Lassenius, C., Smolander, K. (eds) Software Business. Towards Continuous Value Delivery. ICSOB 2014. Lecture Notes in Business Information Processing, vol 182. Springer, Cham. https://doi.org/10.1007/978-3-319-08738-2_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-08738-2_3
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-08737-5
Online ISBN: 978-3-319-08738-2
eBook Packages: Computer ScienceComputer Science (R0)